Titan Machinery added the former Soviet Union to its growing
international footprint as the US-based farm equipment dealer unveiled its
second expansion deal in two days.
Titan Machinery said that it had received consent from CNH
Global, the maker of Case and New Holland equipment, to sell Case products in
Titan said it would open dealerships in the Chernigov, Kiev,
Vinnitsa and Zhitomir regions in north-central Ukraine covered by its permit, which
follows some years of serving the country through exports.
"We have developed strong relationships with many of the
country's top producers and believe this expansion of our geographic footprint
will generate long-term opportunities for our company," David Meyer, the Titan
Machinery chairman and chief executive, said.
The deal represents the second in two days for Titan, which
on Tuesday took its North American dealership chain past 100 with the
acquisition of Toner's, a Nebraska-based farm equipment retailer.
And it is the third abroad for the North Dakota-based group,
following acquisitions in Bulgaria and Romania in the eastern European Union
over the past year.
Indeed, Wednesday's expansion "complements our existing eastern
Europe footprint in Romania and Bulgaria", Mr Meyer said.
Just like home?
Growing in Ukraine has been a "long-term goal" for Titan, the
group said, flagging the country's rich soils and access to the Black Sea, "which
is critical in facilitating machine and crop logistics".
"There is a robust growth opportunity given the country's
prime location and farmland," Peter Christianson, Titan chief operating officer,
said flagging too a similarity between Ukraine conditions and those on the
group's home turf.
"Farming conditions in Ukraine are similar to those in North
Dakota and Iowa."
Titan Machinery shares soared 6.2% to $22.77 in New York.
Broker M Partners on Wednesday restated a "buy" rating on the stock, with a price target of $36.25, saying the shares were "deeply discounted given management's expectations for earnings this year".
Assuming "normal" US weather conditions next year, "Titan is well positioned to capitalise on a stronger year as margins in the agricultural business segment improve and normalise".